Audited Financial Statements For the Year Ended March 31, 2020 Financials.pdf · accounting principles generally accepted in the United States of America. ... Prepaid expenses and

1000 FRIENDS OF OREGON

Audited Financial Statements

For the Year Ended March 31, 2020

520 SW Yamhill Street Suite 500 Portland, Oregon 97204P: 503 227 0581 F: 503 274 [email protected] mcdonaldjacobs.com

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INDEPENDENT AUDITOR'S REPORT

To the Board of Directors 1000 Friends of Oregon

We have audited the accompanying financial statements of 1000 Friends of Oregon (a nonprofit corporation), which comprise the statement of financial position as of March 31, 2020, and the related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the organization’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the organization’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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OpinionIn our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of 1000 Friends of Oregon as of March 31, 2020, and changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Report on Summarized Comparative InformationWe have previously audited 1000 Friends of Oregon’s 2019 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated June 24, 2019. In our opinion, the summarized comparative information presented herein as of and for the year ended March 31, 2019 is consistent, in all material respects, with the audited financial statements from which it has been derived.

Portland, OregonJune 22, 2020


STATEMENT OF FINANCIAL POSITION

March 31, 2020

(With comparative totals for 2019)

2020 2019

ASSETS

Cash and cash equivalents 588,902$ 585,338$

Pledges receivable 25,000 23,000

Prepaid expenses and other assets 31,733 13,530

Property and equipment, net 39,043 35,237

Investments 3,212,741 3,490,727 Beneficial interest in perpetual trust 114,448 128,568

TOTAL ASSETS 4,011,867$ 4,276,400$

LIABILITIES AND NET ASSETS

Liabilities:

Accounts payable and accrued expenses 32,268$ 75,889$ Deferred lease liability 13,409 11,719

Total liabilities 45,677 87,608

Net assets:Net assets without donor restrictions 1,652,657 1,713,361

Net assets with donor restrictions:

Expiring restrictions 973,885 1,121,663 Perpetual restrictions 1,339,648 1,353,768

Total net assets with donor restrictions 2,313,533 2,475,431

Total net assets 3,966,190 4,188,792

TOTAL LIABILITIES AND NET ASSETS 4,011,867$ 4,276,400$

See notes to financial statements.- 3 -


STATEMENT OF ACTIVITIES

For the year ended March 31, 2020


2020

Without Donor 2019

Restrictions Expiring Perpetual Total Total

Support and revenue:

Contributions, grants and event revenue,

net of expenses of $26,685 in 2020 1,207,612$ 262,500$ -$ 1,470,112$ 1,856,287$

Other revenues 9,983 - - 9,983 24,640

Investment income (loss), net (51,474) (85,119) - (136,593) 170,565

Change in value of perpetual trust - - (14,120) (14,120) (3,634)

Net assets released from restrictions:Satisfaction of purpose restrictions 325,159 (325,159) - - -

Total support and revenue 1,491,280 (147,778) (14,120) 1,329,382 2,047,858

Expenses:

Program 1,038,865 - - 1,038,865 853,610

Management and general 204,790 - - 204,790 168,131 Fundraising 308,329 - - 308,329 347,861

Total expenses 1,551,984 - - 1,551,984 1,369,602

Change in net assets (60,704) (147,778) (14,120) (222,602) 678,256

Net assets:Beginning of year 1,713,361 1,121,663 1,353,768 4,188,792 3,510,536

End of year 1,652,657$ 973,885 1,339,648$ 3,966,190$ 4,188,792$

With Donor Restrictions


1000 FRIENDS OF OREGONSTATEMENT OF FUNCTIONAL EXPENSES


ManagementProgram and General Fundraising Total

Personnel costs 759,570$ 120,183$ 236,978$ 1,116,731$ Professional fees 112,023 60,882 25,165 198,070

Occupancy 63,644 7,908 16,939 88,491 Event expense 7,178 7 24,845 32,030

Printing and copying 4,016 2,084 7,642 13,742 Travel and meetings 42,733 2,149 3,924 48,806

Bank fees and dues 15,019 1,117 5,047 21,183 Miscellaneous 34,682 10,460 14,654 59,796

1,038,865 204,790 335,194 1,578,849 Less event expenses

netted with revenue - - (26,865) (26,865)

Total expenses 1,038,865$ 204,790$ 308,329$ 1,551,984$


1000 FRIENDS OF OREGONSTATEMENT OF FUNCTIONAL EXPENSES


ManagementProgram and General Fundraising Total

Personnel costs 517,073$ 97,818$ 231,750$ 846,641$ Professional fees 206,333 48,958 34,178 289,469

Occupancy 58,742 7,945 19,941 86,628 Event expense 4,933 381 17,232 22,546

Printing and copying 3,772 214 9,132 13,118 Travel and meetings 26,679 1,095 5,601 33,375

Bank fees and dues 9,693 3,213 2,440 15,346 Miscellaneous 26,385 8,507 27,587 62,479

Total expenses 853,610$ 168,131$ 347,861$ 1,369,602$



STATEMENT OF CASH FLOWS



2020 2019

Cash flows from operating activities:

Change in net assets (222,602)$ 678,256$

Adjustments to reconcile change in net assets to net

cash flows from operating activities:

Depreciation 10,093 2,048

Donated property and equipment - (7,200)

Net realized/unrealized loss (gain) on investments 155,117 (154,115)

Change in value of perpetual trust 14,120 3,634

(Increase) decrease in:

Pledges receivable (2,000) 46,978

Prepaid expenses and deposits (18,203) 780

Increase (decrease) in:

Accounts payable and accrued expenses (43,621) 4,526 Deferred lease liability 1,690 5,832

Net cash flows from operating activities (105,406) 580,739

Cash flows from investing activities:

Purchase of property and equipment (13,899) (27,585)

Proceeds from the sale of investments 152,986 125,774 Purchase of investments (30,117) (554,006)

Net cash flows from investing activities 108,970 (455,817)

Net change in cash and cash equivalents 3,564 124,922

Cash and cash equivalents - beginning of year 585,338 460,416

Cash and cash equivalents - end of year 588,902$ 585,338$


1000 FRIENDS OF OREGONNOTES TO FINANCIAL STATEMENTS

March 31, 2020

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1. NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Organization1000 Friends of Oregon (the Organization) is an Oregon not-for-profit corporation working on land use issues at federal, state and local levels. The Organization provides no-cost legal assistance to citizens, performs planning and research, and educates the public about land-use laws and issues. Revenues are primarily from contributions from individuals and foundations located in Oregon.

Net AssetsNet assets, revenues, gains, and losses are classified based on the existence or absence of donor or grantor imposed restrictions. Accordingly, net assets and changes therein are classified and reported as follows:

! Net Assets Without Donor Restrictions - Net assets available for use in general operations and not subject to donor (or certain grantor) restrictions.

! Net Assets With Donor Restrictions - Net assets subject to donor- (or certain grantor) imposed restrictions. Some donor-imposed restrictions are temporary in nature, such as those that will be met by the passage of time or other events specified by the donor. Other donor-imposed restrictions are perpetual in nature, where the donor stipulates that resources be maintained in perpetuity. Donor-imposed restrictions are released when a restriction expires, that is, when the stipulated time has elapsed, when the stipulated purpose for which the resource was restricted has been fulfilled, or both.

Cash and Cash EquivalentsFor purposes of the statement of cash flows, the Organization considers all highly liquid investments available for current use with maturities of three months or less at the time of purchase to be cash equivalents.

Property and EquipmentAcquisitions of furniture and equipment greater than $500 and with an anticipated long-term future benefit are capitalized. Property and equipment purchased are recorded at cost. Donated assets are reflected as contributions at their estimated values on the date received.

DepreciationDepreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets which range from 3 to 5 years.

1000 FRIENDS OF OREGONNOTES TO FINANCIAL STATEMENTS, CONTINUED

March 31, 2020

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1. NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

InvestmentsInvestments are carried at fair value. Donor-restricted investment income earned on net assets with perpetual donor restrictions is reported as an increase in net assets without donor restrictions when the board appropriates for expenditure. All other donor-restricted investment income is reported as an increase in net assets with donor restrictions and classified according to the nature of the restriction.

Deferred Lease LiabilityEscalating lease obligations are expensed over the life of the lease on a straight-line basis over the lease term. The difference between the lease obligation and the straight-line amount is reflected as deferred lease liability.

Functional ExpensesThe costs of providing various programs and other activities have been summarized on a functional basis in the statements of activities and functional expenses. Accordingly, certain costs have been allocated among the programs and supporting services benefited. The expenses that are allocated include personnel expenses and shared costs for occupancy and general operating costs which are allocated on estimates of time and effort.

Income Tax Status1000 Friends of Oregon is a not-for-profit corporation exempt from income tax under section 501(c)(3) of the Internal Revenue Code and comparable state law. The Organization has no activities subject to unrelated business income tax The Organization is not a private foundation.

The Organization follows the provisions of FASB ASC Topic Accounting for Uncertainty in Income Taxes. Management has evaluated the Organization's tax positions and concluded that there are no uncertain tax positions that require adjustment to the financial statements to comply with provisions of this Topic.

Use of EstimatesThe preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.


March 31, 2020

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1. NATURE OF ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued

Revenue RecognitionContributions, which include unconditional promises to give (pledges), are recognized as revenues in the period the Organization is notified of the commitment. Bequests are recorded as revenue at the time the Organization has an established right to the bequest and the proceeds are measurable.

Conditional promises to give, that is, those with a measurable performance or other barrier, and a right of return, are not recognized until the conditions on which they depend have been substantially met.

Donations of property, equipment, materials and other assets are recorded as support at their estimated fair value at the date of donation. Such donations are reported as support without donor restrictions unless the donor has restricted the donated asset to a specific purpose.

The Organization recognizes donated services that create or enhance nonfinancial assets or that require specialized skills, are provided by individuals possessing those skills, and would typically need to be purchased if not provided by donation.

Change in Accounting PrincipleThe Organization implemented Accounting Standards Update 2018-08, Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made. This standard assists organizations in evaluating whether transactions should be accounted for as contributions or exchange transactions and determining whether a contribution is conditional. The provisions of ASU 2018-08 were implemented applicable to both contributions received and to contributions made in the accompanying financial statements under a modified prospective basis.

Summarized Financial Information for 2019The financial information as of March 31, 2019 and for the year then ended is presented for comparative purposes and is not intended to be a complete financial statement presentation.

2. AVAILABLE RESOURCES AND LIQUIDITY

The Organization regularly monitors liquidity required to meet its operating needs and other contractual commitments, while also striving to maximize the investment of its available funds. For purposes of analyzing resources available to meet general expenditures over a 12-month period, the Organization considers all expenditures related to its primary operations to be general expenditures. It excludes financial assets with donor or other restrictions limiting their use.


March 31, 2020

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2. AVAILABLE RESOURCES AND LIQUIDITY, Continued

The Organization has various sources of liquidity at its disposal, including cash and cash equivalents, investments and a line of credit. See Note 7 for information about the Organization’s line of credit.

Financial assets of the Organization consist of the following at March 31, 2020 and 2019:

2020 2019

Cash and cash equivalents 588,902$ 585,338$ Pledges receivable 25,000 23,000 Investments 350,745 332,964 Beneficial interest in assets held by OCF 2,861,996 3,157,763 Interest in perpetual trust 114,448 128,568

3,941,091 4,227,633 Less amounts unavailable for general expenditure:

Net assets with donor restrictions 2,313,533 2,475,431 Board designated net assets 283,552 261,548

Financial assets available for general expenditure 1,344,006$ 1,490,654$

Board designated funds are maintained as operating reserves and the release of funds may be approved by simple majority vote of the Board of Directors. See Note 9 regarding board designated net assets.

The beneficial interest in assets held by OCF with donor restrictions are restricted to be held as an endowment and are subject to the distribution policies of the OCF. Under these policies, future distributions are estimated at 4.35%, of the total fund balance (approximately $124,000) to be available for general expenditures in 2020. See Note 6 and Note 15 regarding the beneficial interest in assets held by OCF.

3. PLEDGES RECEIVABLE

Pledges receivable represent unconditional promises to give. Grants and contributions receivable at March 31, 2020 and 2019 are receivable within one year. Management believes that all amounts are fully collectible and, therefore, no allowance for uncollectible balances has been recorded.


March 31, 2020

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3. PLEDGES RECEIVABLE, Continued

The Organization is also entitled to additional grant funds of $17,500 contingent upon 500 new members. Accordingly, the grant revenue is not reflected in the financial statements. The Organization will recognize the pledge as revenue when conditions have been met.

4. FURNITURE AND EQUIPMENT

Furniture and equipment consist of the following at March 31, 2020 and 2019:

2020 2019

Furniture and equipment 89,902$ 88,503$ Website 39,500 27,000 Donor database 11,000 11,000

140,402 126,503 Accumulated depreciation (101,359) (91,266)

Property and equipment, net 39,043$ 35,237$

5. INVESTMENTS

The Organization has investment funds with the Oregon Community Foundation (OCF). The fund is administered as a component of OCF and is subject to OCF’s Articles of Incorporation and Bylaws.

Under the terms of the agreement, variance power has been granted to OCF, however, the Organization is the beneficiary of the funds and the transfer is reciprocal in nature. Accordingly, OCF recognizes the fund as a liability on its statement of financial position.

Investments consist of the following at March 31, 2020 and 2019:

2020 2019

Beneficial interest in investments at

Oregon Community Foundation 2,861,996$ 3,157,763$ Short-term treasury funds 350,745 332,964

Total investments 3,212,741$ 3,490,727$


March 31, 2020

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6. BENEFICIAL INTEREST IN PERPETUAL TRUST

The Organization was named the ultimate beneficiary of an irrevocable trust (split-interest agreement) held by Wells Fargo on behalf of the Organization. Under the terms of the trust, the Organization will receive 10% of the assets of the trust upon the death of the current beneficiary. The beneficial interest in the trust is valued at the Organization’s entitled percentage of the fair market value of the investments and is reported as net assets with perpetual restrictions (See Note 11). Upon distribution of the trust assets, the net assets will be recharacterized as net assets without donor restrictions. The change in value of the perpetual trust was ($14,120) and ($3,633) for the years ended March 31, 2020and 2019, respectively.

7. LINE OF CREDIT

The Organization has a stand-alone revolving line of credit of $150,000 with a financial institution. Interest on the line is payable monthly on outstanding advances with interest at the bank’s prime rate (4.75% at March 31, 2020) but not less than 4.00% annually. The line expires March 2021 and is secured by all business assets.

8. LEASE COMMITMENTS

The Organization leases administrative and operating facilities and equipment under various operating lease agreements summarized below:

! Portland administrative office, term January 2019 through February 2024, initial monthly rent of $5,585 with annual escalations.

! Grants Pass administrative office, term September 2019 through August 2020, monthly rent of $330.

! Copier, term January 2019 through January 2024, monthly rent of $366

Total rent expense under the above leases approximated $77,500 and $67,400 for the years ended March 31, 2020 and 2019, respectively.


March 31, 2020

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8. LEASE COMMITMENTS, Continued

Future minimum lease commitments under noncancellable operating leases are as follows:

Year ending March 31, 2021 75,600$

2022 76,000

2023 78,200

2024 72,800

Total 302,600$

9. NET ASSETS WITHOUT DONOR RESTRICTIONS

Net assets without donor restrictions consist of the following at March 31, 2020 and 2019:

2020 2019

Undesignated 1,369,105$ 1,451,813$

Board designated 283,552 261,548

Total net assets without donor restrictions 1,652,657$ 1,713,361$

Board designated net assets are designated as an operating reserve.

10. NET ASSETS WITH EXPIRING DONOR RESTRICTIONS

Net assets with expiring donor restrictions consist of the following at March 31, 2020 and 2019:

2020 2019

Circuit Ride program 80,564$ 140,589$

Land Use Legal Defense Fund 508,821 541,835

Metro 4 Everyone 15,061 34,306

Regional Equity Atlas 13,757 21,257

Vintner's Fund 66,703 79,477

Working Lands Engagement Coordinator 89,372 225,000

Operations Director 46,527 -

Urban Land Advocate 100,000 -

Unappropriated endowment earnings (Note 15) 53,080 79,199

Total net assets with expiring restrictions 973,885$ 1,121,663$


March 31, 2020

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11. NET ASSETS WITH PERPETUAL DONOR RESTRICTIONS

Net assets with perpetual donor restrictions consist of the following donor-restricted endowment funds at March 31, 2020 and 2019, which restrict the principal portion of the endowment in perpetuity but permit the utilization of investment income for programs:

2020 2019

Templeton Fund 1,050,200$ 1,050,200$

Gerhardt Fund 150,000 150,000

Rekate Fund 25,000 25,000

Interest in perpetual trust 114,448 128,568

Total net assets with perpetual donor restrictions 1,339,648$ 1,353,768$

Also see Note 15, Endowment.

12. RETIREMENT PLAN

The Organization offers a 403(b) thrift retirement plan whereby the Organization contributes three percent of the salaries of eligible employees. The previous Simplified Employee Pension (SEP) plan and 403(b) employee-contribution only plan maintained by the Organization were terminated during 2020. Contributions to the plan approximated$11,300 and $7,000 for the years ended March 31, 2020 and 2019, respectively.

13. CONCENTRATIONS OF CREDIT RISK

The Organization maintains its cash balances in several financial institutions. The balances are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. Balances in excess of insured limits were approximately $355,200 and $239,400 as of March 31, 2020 and 2019, respectively.

Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statement of financial position.

The Organization's revenues are concentrated with approximately 25% and 36% of total revenues coming from one entity of the years ended March 31, 2020 and 2019, respectively.


March 31, 2020

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14. FAIR VALUE MEASUREMENTS

Assets recorded at fair value in the statement of financial position are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Level inputs are defined as follows:

Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.

Level 2: Observable inputs other than those included in Level 1, such as quoted market prices for similar assets or liabilities in active markets, or quoted market prices for identical assets or liabilities in inactive markets.

Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair values requires significant management judgment or estimation.

Fair values of assets at March 31, 2020 and 2019 are as follows:

Total Level 1 Level 3

March 31, 2020Assets recorded at fair value:

Beneficial interest in investments held by OCF 2,861,996$ -$ 2,861,996$

Short-term treasury funds 350,745 350,745 - Interest in perpetual trust 114,448 - 114,448

March 31, 2019Assets recorded at fair value:

Beneficial interest in investments held by OCF 3,157,763 - 3,157,763

Short-term treasury funds 332,964 332,964 - Interest in perpetual trust 128,568 - 128,568

Fair values for Level 1 investments are determined by reference to quoted market prices and other relevant information generated by market transactions.

Fair values of the beneficial interest in investments held at Oregon Community Foundation (OCF) have been provided to the Organization based on information provided by OCF which represents the Organization's proportionate share of investments owned by OCF, using a market approach.


March 31, 2020

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14. FAIR VALUE MEASUREMENTS, Continued

Fair values of the interest in the perpetual trust have been provided to the Organization based on information provided by the trustee which represents the Organization's proportionate share of investments held by the trustee, using a market approach.

Fair Assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3 inputs):

Beneficial

interest in

investments

at OCF

Interest in

perpetual

Trust Total

For the year ended March 31, 2020Balance at beginning of year 3,157,763$ 128,568$ 3,286,331$ Net realized/unrealized losses (165,090) - (165,090) Interest and dividends 28,175 - 28,175 Distributions and investment management fees (158,852) - (158,852) Change in value of interest in perpetual trust - (14,120) (14,120)

Balance at end of year 2,861,996$ 114,448$ 2,976,444$

For the year ended March 31, 2019Balance at beginning of year 2,609,174$ 132,202$ 2,741,376$ Deposits 500,000 - 500,000 Net realized/unrealized gains 152,678 - 152,678 Interest and dividends 21,686 - 21,686 Distributions and investment management fees (125,775) - (125,775) Change in value of interest in perpetual trust - (3,634) (3,634)

Balance at end of year 3,157,763$ 128,568$ 3,286,331$

Gains and losses from investments are included in investment income in net assets without donor restrictions and net assets with expiring restrictions investment income in the statement of activities. Change in value of the interest in perpetual trust isincluded in net assets with perpetual restrictions in the statement of activities.


March 31, 2020

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14. ENDOWMENT

The Organization’s endowment consists of funds established for long-term support of the Organization and includes donor-restricted endowment funds. As required by U.S. generally accepted accounting principles, net assets associated with endowment funds are classified and reported based on the existence or absence of donor-imposed restrictions.

Interpretation of Relevant LawThe Board of Directors of the Organization has interpreted Oregon’s Uniform Prudent Management of Institutional Funds Act (UPMIFA or the Act) as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, the Organization classify as net assets with perpetual restrictions (a) the original value of gifts donated to the perpetual endowment (b) the original value of subsequent gifts to the perpetual endowment and (c) accumulations to the perpetualendowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor-restricted endowment fund that is not classified as net assets with perpetual restrictions is classified as net assets with expiring restrictions until those amounts are appropriated for expenditure by the Organization in a manner consistent with the standard of prudence prescribed by the Act. In accordance with UPMIFA, the Organization consider the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds:

(1) The duration and preservation of the fund(2) The purposes of the Organization and the donor-restricted endowment fund(3) General economic conditions (4) The possible effect of inflation and deflation(5) The expected total return from income and the appreciation of investments(6) Other resources of the Organization(7) The investment policies of the Organization


March 31, 2020

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15. ENDOWMENT, Continued

Changes in endowment net assets for the years ended March 31, 2020 and 2019 are as follows:

Expiring PerpetualRestrictions Restrictions Total

Endowment net assets - March 31, 2018 76,034$ 1,357,402$ 1,433,436$

Investment return:Investment income, net of fees 20,312 - 20,312 Net appreciation 38,791 - 38,791 Change in value of perpetual trust - (3,634) (3,634)

Appropriation of endowment assetsfor expenditure (55,938) - (55,938)

Endowment net assets - March 31, 2019 79,199 1,353,768 1,432,967

Investment return:Investment gain, net of fees 12,395 - 12,395 Net appreciation 18,120 - 18,120 Change in value of perpetual trust - (14,120) (14,120)

Appropriation of endowment assets

for expenditure (56,634) - (56,634) Endowment net assets -

March 31, 2020 53,080$ 1,339,648$ 1,392,728$

Return Objectives and Risk ParametersThe Organization has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assts. Endowment assets include those assets of donor-restricted funds that the Organization must hold in perpetuity or for a donor-specified period. Under this policy, as approved by the Board of Directors, the endowment assets are invested in a manner that is intended to produce results that exceed the price and yield results of the S&P 500 index while assuming a moderate level of investment risk.

Spending Policy and How the Investment Objectives Relate to Spending PolicyThe endowment funds are invested with OCF. The Board of Directors of OCF determines investment and spending policies for all funds held by OCF. Currently, the Organization receives bi-annual distributions from funds held at OCF. The distribution rate, as determined by the Board of Directors of OCF, is currently between 4.5% and 5.0% of the average fair market of the Organization’s funds based on a 13 quarter trailing average.


March 31, 2020

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15. ENDOWMENT, Continued

Strategies Employed for Achieving ObjectivesTo satisfy its long-term rate-of-return objectives, the Organization relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends).Funds held with OCF are invested in a mixture of equities, fixed-income instruments, alternative investment classes, distressed debt, private investments and cash. The Organization believes the investment and spending policy is consistent with the objective to maintain purchasing power of the endowment assets held in perpetuity as well as to provide additional real growth through new gifts and investment return.

16. RELATED PARTY DISCLOSURE

Certain board members are business owners in the community. At times, the Organization enters into transactions with companies where board members are key employees or owners. These transactions occur in the normal course of business, were insignificant to the financial statements and disclosed as part of the Organization's conflict of interest policy.

17. SUBSEQUENT EVENTS

The Organization has evaluated all subsequent events through June 22, 2020, the date the financial statements were available to be issued.

The Organization has been negatively impacted by the effects of the world-wide coronavirus pandemic. The Organization is closely monitoring its operations, liquidity, and capital resources and is actively working to minimize the current and future impact of this unprecedented situation. As of the date of issuance of these financial statements, the full impact to the Organization’s financial position is not known.

Documents

Audited Financial Statements For the Year Ended March 31, 2020 Financials.pdf · accounting principles generally accepted in the United States of America. ... Prepaid expenses and